There are many companies who do not even realise that their competence in key areas of their business processes is below the level it should be. The first task in improving such companies' performance is to move from unconscious incompetence towards conscious incompetence. From there, a course has to be set to move towards improved performance found in conscious competence.

Aegis assists companies who are active in the engineering, procurement and construction market by identifying where they are on the competence diagram. By using a competence chart we can show not only how the company's present level of competence measures up to its aspirations but we can also identify the gap between the actual and needed competencies.

A few Questions

• Do you start your project with a structured idea of how many Contracts you will have?
• Have you determined how you will price these contracts?
• Have you made a resource survey to determine the availability and qualifications of Contractors able to submit tenders?
• Do you have a full-length schedule that plans the work from the tender stage to the completion date?
• Have you compared this schedule with the Procurement schedules for the delivery of materials?
• Have you ensured that the risks and liabilities which you carry in the Contract with your Client are reflected in the Contract formats with Contractors?
• Have you agreed your plan with the engineering/design disciplines?

For every "Yes" in response to the above questions, the value accruing to your Contracting organisation increases and, when plotted on the chart above, will show you how close to the ideal competence level your company is.

Balancing Competencies

It is important, when looking at an engineering, procurement and construction organization, to look not just at the presence of competencies but also their balance within the same organization. A company that strives for operational excellence in engineering, procurement and construction work may look to developing the highest level of competence in all the related functions by concentrating on hiring personnel, buying tools and developing procedures. This is not always necessary. A company may choose to excel in only those areas that form a core part of its business and to look elsewhere to balance out a shortfall in the remaining areas.

For these companies, Aegis can offer support in the areas of Contract and Procurement Management, Scheduling, and Cost control. We supply these services either as a transition measure, temporarily compensating for the shortfall in competencies and giving market edge back to a company that would otherwise lag behind or we form lasting relationships with those of our clients who choose not to develop the competencies in house but to use Aegis expertise as a strategic tool.

There is always some discussion about whether Contractors and Suppliers can really be treated in the same way. Aegis acknowledges that the two are different and it is our awareness of these differences that allow us to deliver such a broad but extensive service. Aegis can contribute to an improvement in the areas of your external corporation, regardless of whether you are talking about suppliers of goods and equipment or suppliers of services and labour.

Benchmarking your supplier performance

Why benchmark? The answer is simple. Wherever your Clients demand of you a consistent high level of quality and where your competitors are continuously improving their performance you must examine how your strategic Suppliers and Contractors are supporting your business.If the success of your business is dependent upon the performance of your suppliers and subcontractors you must know how they are performing. You have put the quality of at least part of your services in the hands of a third party and you cannot afford to lose control over this.

Benchmarking works to the advantage of both you and your Suppliers and Contractors. The relationship between you and these third parties is influenced by the contributions of both of you to the relationship. Poor performance or non-performance in the relationship is often due to something within the Supplier’s or Contractor's organisations but almost as often it could be due to something in your own organisation.

Also important is the consistency in the criteria applied to Suppliers and Contractors:

• Who are qualified in your company database
• Who are used on specific Projects
• Who are assessed on current performance

Benchmarking will provide you with a clear picture of the performance within your relationships and will set clear goals for the relationships, acting as imperatives to continuous improvement.

What do we deliver to you?

Aegis will supply you with detailed reporting showing you:

• Which Suppliers and Contractors should be targeted for benchmarking
• Results of benchmarking
• Recommendations for improvement
• Furthermore, Aegis can perform regular remeasurement exercises to track improvements

Presentation and Education

Presentation Sessions to Focus Groups
Aegis will help you to present the essentials of good practice in Contracting & Procurement to your internal and external Clients. We do this with:

• In-house presentations to underpin your own improvement programmes to enhance knowledge about Contracting & Procurement processes
• Training you in how to present your Contracting & Procurement organisation in a professional fashion to Clients
• Representing you and your company in external presentations

Aegis also organises in-house workshops to bring awareness to key groups in your organisation of what professional Contracting & Procurement entails and long-term improvement projects. These projects are aimed at capturing the benefits we have talked about above. Aegis works with its Clients to structure and implement these improvement projects. Naturally, we are also available to make periodic reviews of such projects, measuring the degree in which they are meeting their improvement targets.

Contracting and Procurement is an essential part of the engineering, procurement and construction world. More and more, however, even those companies who do not work on a Project basis are finding that it is attractive to outsource some of their key activities. Regardless of whether you outsource on a Project basis or whether you are looking to Contracting and Procurement as an answer to the question of how to improve your company’s performance, success lies in the compilation of a well thought out strategy. Aegis will help you set up this plan and will lead you through the essential steps to its completion. Aegis distinguishes itself in this respect because we do not just advise on an academic level. Our skills, competencies and tools are available to you from the level of strategic planning right down to the operational work involved.

Contracting and Procurement Plan

On an engineering, procurement and construction Project the supply of materials and equipment and the services required to perform Construction/Installation represent up to 80% of the total Project costs. It follows that the business of Contracting and Procurement cannot be undertaken on an ad hoc basis. Equally, when you decide that Contracting and Procurement is the answer to the traditional make or buy dilemma, it is not a decision to be undertaken lightly, especially if you are new to the concept of Contracting and Procurement. Aegis supports the organisational learning that is needed to remain competitive in the engineering, procurement and construction world.

The objectives of a Contracting and Procurement Plan can cover many things such as:

• Meeting time targets
• Maintaining high levels of safety
• Saving identified amounts of money
• Using Suppliers and Contractors from certain geographical areas
• Ensuring that concurrent operations or businesses are not impacted

These objectives can be affected by the risks in the diagram and many more. Consider, for instance:

• You or your Client may already have agreements in place which suggest preferential treatment of certain Contractors or Suppliers
• European Community regulations may affect the work
• There may be environmental requirements that materially influence how the work can be performed
• You may have a resource problem in performing the design work necessary.

Looking at objectives and risks as interactive forums results in a strategy that anticipates the various hindrances that would otherwise come as rude surprises at a later date.

Prime Contract Key

The Contract you sign with your Client contains many facets such as:

• The scope of services that you have to provide
• The technical requirements of the services
• The terms and conditions that you have to satisfy
• The terms of payment
• Sanctions and penalties
• ...and many, many more

Aegis provides you with a "key document" that will open up the Contract for you and will show you what the risks and liabilities of the Contract are. This key document is important to you for two reasons:

• It allows you to take timely action to modify your standard operating procedure to the needs of the specific Project in hand
• It makes the risks and liabilities of the Contract with your Client clear to the rest of your organisation. Consequently, your organisation will be aware of the consequences of their own actions in the larger context.

The key document is the foundation stone of your policy for Managing Changes.

Tender Process Management

One of Aegis' strongest competencies is our skill in ensuring that a package that is offered for tender is of sufficient quality to result in realistic and accurate pricing from Contractors and Suppliers. We look at the narrative scope of work and the commercial models for the tender, ensuring that they are complete and mutually complementary. We also check that the design information upon which the Contractors and Suppliers base their bids is fit for purpose so that there is no gap between the narrative and technical requirements for the work. All this is performed against the background of the Contracting and Procurement Plan, ensuring that each tender package addresses the objectives, risks and strategies already agreed.

We can plan for you the overall tender operation, ensuring that tender packages are issued in the right order and that any delays or difficulties in obtaining bids is highlighted to you in a timely fashion, allowing work around plans to be compiled.

With an eye on our policies of Managing Changes and Claims Prevention we ensure that the tender process is properly coordinated so that:

• There is a record of the questions asked by bidders and the answers given
• Bids from Contractors and suppliers are responsive to the original tender request and the questions and answers that occurred in the bidding period
• Communications are clear and directed through accessible channels
• Any changes to the tender package are properly communicated

Tender Analysis

As an independent consultant Aegis brings great value to the process of review and evaluation of bids in response to tenders. We have a great experience in the process across the industry and we have therefore a broad base of lessons learned. We know what can go wrong in the review process and we can steer the process away from such pitfalls. We also have a sound platform of skills in presenting the review results in a coherent and transparent fashion.

The advantage peculiar to tender cycles based on competitive bidding is the number of anomalies that become apparent when comparing bid responses. Our strength lies in our ability to analyse the responses on a like-with-like basis, thus highlighting the anomalies. These in turn lead to the identification of:

• Errors and misunderstandings in the tender process
These can be the embryonic claims, which if not highlighted at this stage when your negotiating strength is at its greatest, will lead to nasty surprises in the future
• Opportunities
These often become apparent when individual bidders identify alternatives and options which, when taken up at the award of the agreement, can lead to capturing Project objectives more securely

The other aspect of tender analysis is inseparable from the risk areas highlighted in your Contracting and Procurement plan. Aegis looks at tender responses with the question "what if" constantly in mind. Experience shows that the cheapest price offered today may grow to unacceptable limits later as circumstances change and the Contractor or Supplier applies its commercial model to these changes.

An award recommendation compiled by Aegis is a thorough document that includes:

• A coherent and transparent overview of the hard money bid in response to the tender
• A detailed listing of amounts which accrue from the clarification and correction of anomalies and errors
• A summary of the potential benefits, in money, time and risk management, of pursuing opportunities
• An estimate of what an upset situation would cost, also in terms of money, time and risk management

In short, we do our best to give you a complete picture of the total costs of awarding to one or other of the bidders. This allows your management to make the best possible decision at the right time.

Negotiation and Award of your Agreements

As we have said before, Aegis is a long-term partner and we believe in starting what we finish. We will take the award recommendation into the boardroom and perform the final negotiation. Aegis does not believe that negotiating is just chiselling at the price. There are matters of schedule, risks, liabilities and rewards that need to be balanced in the final agreement. We negotiate to a plan that shows clearly defined goals. When we reach the goal, we stop negotiating. Aegis works with you to compile the negotiating plan so that negotiations run smoothly and are as far as possible under control.

There is always the temptation to breathe a sigh of relief when negotiations are over, to take a break before getting down to work with the Contractor or Supplier. To a large extent this is encouraged by the honeymoon period of the first few weeks or months of a Contract or Purchase Order. Aegis ensures that the honeymoon can really be enjoyed by ensuring that negotiations result in the Contractor or Supplier buy-in to the final deal. You may think you have been clear when you made the final negotiating proposal but are you really sure that the Contractor or Supplier has fully understood? Aegis is a skilled communicator and we ensure that nobody leaves the negotiating table until there is real proof of understanding of what has been agreed and we back this up by issuing Contract and Purchase Order documents for signature in as short a time as possible.

There have been many definitions written of the word claim. At Aegis, we keep it simple. When you are confronted with a request from your Contractor or Supplier for more money or an extension of a completion date and you cannot settle this request using the terms and conditions of your agreement with that Contractor or Supplier, you have a claim. This claim will involve you in a great deal of discussion and negotiation and it may even drag you into the courts. Another way of putting it is that you have lost influence over the risks that concern you.

The competitive nature of the industry coupled with relatively low rates of return, makes it almost inevitable that claims are a part of the construction process. While it may seem that claims suddenly appear at the end of a project when the costs have been totalled and found to exceed revenue, in reality most claims originate at the tender stage and are exacerbated and expanded on throughout the duration of the project.

Claims are also a reflection of the quality of the project management system. A well-managed project will have relatively few claims and these will be easily resolved. A poorly managed project, on the other hand, will have an abundance of "total cost" or "global" claims. At Aegis Contract Management, we believe that the basic, fundamental techniques of contract management become the most powerful and effective means of avoiding or resolving claims issues.

Claims Prevention

As in most walks of life, the success or failure of a project is often determined by the amount of preparation taken and by how thorough those preparations are. This is no different in construction generally, and claims prevention in particular. Preparation includes proper identification of the project requirements, through accurate design and engineering, effective contract planning, "fit for purpose" contract documents, proper contractor review and selection and so on. Most important is the three-stage process of:

• Visualising what upset situations may occur
• Obtaining an accurate view of the work provided for in bids received
• Designing commercial models and agreements that address the upset situations.

In effect, the result of this exercise is to ensure that occurrences are catered for in the contract. Hence, your concerns and risks can be adequately influenced by your contract. Equitable contract terms and a rational allocation of the risks will result in fewer claims and disputes. Despite popular belief to the contrary, one-sided contracts only result in higher prices and are often unenforceable when a dispute goes to litigation. Similarly, trying to cater for every conceivable risk in a Contract results in Contracts that are long, bulky, difficult to read and generally very intimidating for Contractors and Suppliers and also result in higher prices.

Given that construction claims are expensive, time consuming with no guarantee of the outcome, a pro-active approach to contract administration is an essential tool in prudent project management and must be effectively implemented to ensure that the project does not get into trouble from the outset. One of the most powerful tools that Aegis uses to assist you in preventing claims is our upset assessment approach to Contracting and Procurement work. Some of the basic questions we ask in this approach are:

• Is it certain that you can grant access to the site of work on time? If there is a risk that this will be delayed, then by how long. Is it worthwhile to obtain terms for delayed access or to specify that access will be during a "from...to... window"?
• Can you supply the basic documentation for the work on time? Are there bottlenecks? How can the bottlenecks best be relieved?
• Can you supply "Free Issue" materials & equipment on time? If there is a risk of delay is this sufficiently covered in:
• Your Purchase Order for the Free issue materials
• Your Contract for their installation?
• How likely is it that the design will change? Have you designed a pricing structure that is suitable for the most likely scenario?
• Can you afford to allow a delay to occur in the completion dates agreed? If so, how long could such a delay be? If not, how do you build a fallback plan to ensure that delays can be handled?
• Is there a risk that you will need to terminate the contract? If so, are there termination clauses included in the General Terms and Conditions that cover this event properly?

The lesson to be learned is that to manage the construction process successfully, it is necessary to have the foresight to resolve the issues above before they become another claim!

Claims Avoidance

The claims that develop after the award of a Contract or Purchase Order derive generally from different areas from those we talked about under Claim Prevention. The avoidable, post award claim arises because the work processes necessary to manage the relationship with the Contractor or Supplier, and which are an essential part of Post Contract Administration, are insufficiently applied. This, in turn, means that three critical areas are neglected:

• Communication
• Reporting
• Recording

Lack of communication, incomplete communication, unclear communication and miscommunication can all lead to claims. Aegis is particularly skilled in this area that includes not only clear, unambiguous correspondence but also structuring and leading meeting forums, presentations and inter-personal skills.

CAT reporting (Clear, Accurate and Timely) is invaluable in avoiding claims. Reducing reporting formats to the minimum required to demonstrate the status of Contracts and Purchase Orders avoids the familiar situation of widely distributed, thick reports that nobody bothers to read It also makes reporting easier and quicker. Standardising reporting formats across a Project makes that the inter-relationship between the various Contracts and Purchase Orders transparent.

Accuracy in reporting is crucial. Not only does it give you the correct picture of work status but also consistently accurate reporting increases the level of confidence in your relationship with Contractors and Suppliers. The timeliness in reporting is what makes it worthwhile. You need accurate, recent information about your projects, not ancient history. You need to ensure that you know in good time what trends are developing so that you can take appropriate action. We at Aegis apply the CAT principles both downstream, towards Contractors and Suppliers as well as upstream towards clients.

Communication and reporting are only two of the three essential supports of a Claim avoidance platform. Keeping records of those communications and reports is the third. Every day, on every Project, hundreds of discussions take place and agreements made at the outcome. These can range from where to put the new photocopier to a revised delivery date for some piece of major equipment. Many day-to-day activities involve directions received by telephone, at meetings, casual "shoulder taps" etc. Some of these directions may create an apparent authority, others are purely oral agreements and must be kept as such. After all, if you had to write down every agreement you made and get a signature to it, your life would be one long, bureaucratic nightmare. What Aegis brings to your Project is the ability to structure lines of authority and identify just which agreements are critical and how these agreements can be recorded in a clear, accessible fashion so that they can be used later as a basis for action.

Claims Against Your Company

Claims do not just appear by magic at the end of a project. They originate, are planned and prepared throughout the duration of the job. The claimant is not your friend. Having seen his direct costs exceed his revenue, the claimant wants that money from you. A well-organised approach is necessary to prepare a defence. With the help of Aegis during the execution of the work, you will have ensured that a good system for handling change orders, documents, transmittals, requests for information, daily reports, schedules, etc. has been applied.

Aegis will lead you through the steps leading to settlement of the claim. At each step, where your own resources are insufficient to underpin the step, Aegis can supply complementary skills so that the process can move onto the next step. While each claim is unique and some of the steps can be omitted, the full step process includes the following:

• Prepare your defence team
• Establish the basis in law and in the contract
• Organise a discovery process. This involves gaining access to all the contemporaneous records of both parties for further analysis.
• Identify the key issues and major categories of the claim and be prepared to challenge their applicability
• Try to demonstrate that no catastrophic changes occurred
• Challenge the claimant on its failure to follow contractual provisions
• Identify where the money was spent
• Challenge the claimant’s costs
• Prepare a comprehensive schedule to analyse impacts
• Determine the range of exposure
• Negotiate, litigate or settle

Remember, you will pay for what are finally agreed as the damages to resolve a dispute that could probably have been avoided in the first place.

Claims from your Company

Naturally, in the event that it becomes necessary to present a claim to your Client, Aegis will use the same skills talked about in the previous section to compile a claim that will withstand your Client's tests. However, it is just as unpleasant for you to go through this process, as it is to have to fight off a claim from one of your Contractors or Suppliers. Furthermore, the claim may inflict lasting damage on your relationship with your Client.

Aegis' defensive management skills will help you avoid the need to claim. Our skills and tools in the areas of Communication, Reporting and Recording will allow you to get a better, more accurate and earlier picture of any problems that may be developing on your Projects and you will be able to approach your Client in a timely fashion. In our experience, Clients are far more willing to listen to well reasoned arguments during the life of the Project than they are to accept desperate requests after the work is finished. Furthermore, leaving the submittal of a Claim until the last minute can simply mean that the Client is the party that has the greatest negotiating power when it comes to settling the claim around the table.

The commercial awareness, of which we have talked so much elsewhere on this website, is only one of the critical elements in successful Projects. The other element is the awareness of time. This awareness comes only with a rational system of Planning and Scheduling. As an additional benefit you will find that once your Project is embraced within this system of planning and scheduling your strategy for Managing Changes and Claims Prevention becomes even more effective. The framework comprises a plan of the work that needs to be accomplished and a system to monitor the performance of that work and is generally referred to as the Control System.

Aegis defines five basic elements necessary for a Control System:

• The plan
• The schedule
• Progress reports
• Trend analysis
• Forecast reporting

The plan identifies discreet, manageable packages of work and the organisation responsible for each package. Aegis expertise lies in our ability to break the overall Project up into these manageable packages and to codify them into a Control System framework. The framework provides you with immediate benefits:

• It lays the foundation stone for expediting the deliverables from engineering;
• It provides clarity to the Project organisation, allowing the interrelationship between parts of the work to be seen.

Based on the plan the schedule breaks down the work as required into smaller segments. At this level it is possible to identify the milestones for key material and equipment deliveries, so that tender packages are prepared and issued in the right order. It also identifies the "windows" for carrying out the field construction.

This logical cascade from the plan to the schedule provides you with the basis of the dialogue between you and your contractors as time and the cost of resources become visible and tangible values. Relevant parts of the Schedule are fed through to the Contracts and Purchase Orders awarded. This synchronises work in one fluid line from the engineering office, through the Contracting and Procurement process into the external commitments with Contractors and suppliers.

The progress report is the reflection of the overall monitoring of the actual status of work. The accurate monitoring of progress is intended to provide two things:

• Confirmation that work is proceeding on target. This in turn provides reassurance and acts as a strengthening factor in your relationships with both your Client and your Contractors and Suppliers.
• An early warning of where work is drifting off target. This drift can be both in terms of falling behind schedule and getting ahead of schedule. Both kinds of drift can cause serious problems but because Aegis uses the logical cascade from the plan to the schedule the effects of these drifts are more visible and appropriate action can be taken promptly.

We perform trend analysis to identify deviations from the original plan as well as to evaluate productivity and variances in the schedule Trending allows your Management a forward look even further than the cycle of the usual monthly reporting allows. Aegis uses trend analysis of productivity to identify potential claims before they happen. Forecast reports can be generated using the trend analysis as a basis. These reports are an effective means of identifying potential schedule or budget overruns. We can help you analyse these reports and identify possible upset plans or re-scheduling to mitigate any damaging effects. Aegis believes that the three elements of Plan, Progress report and Forecast are an inseparable value chain that you cannot afford to break and we commit to providing skills and tools for the entire chain.

Post Contract Administration provides the means to ensure that the contract you sign today will still represent value for money at the end of your project. As we have said elsewhere, in Contracting and Procurement Strategy, it is essential to build a bridge between the needs of Construction and the Engineering output, and the Contracting and Procurement Plan does this. The services offered by Aegis in the area of Post Contract Administration represent one of the important buttresses supporting this bridge. They are directed at ensuring that the agreements made in your original Contract or Purchase Order are sustainable over the life of your Project.

All too often, a Contract or Purchase Order is awarded and then the essential maintenance of the agreements is virtually ignored until the due date for completion. This inevitably results in poor performance of the work and, more often than not, a claim. Aegis Contract Management believes that professional and timely post-contract administration lies at the very heart of change management and claims prevention.

Managing Changes

The best time to avoid or to mitigate changes is before a contract is even awarded. Many claims originate from the naive and irresponsible belief that a "Lump Sum" contract will guard against poor scope definition as well as any cost or schedule growth. Accurate scope definition is crucial to the overall cost of a project and the time spent in defining the scope of work prior to contract award will be amply rewarded. However, quite often all the hard work put into scope definition can be destroyed when the scope comes to be administered. Aegis offers a total commitment to solving this problem. The same skilled and experienced people who contribute to the award of your Contracts and Purchase Orders are available to follow these agreements up in the execution phase giving you continuity of knowledge, skill and commitment.

Almost all projects encounter changes in one form or another. Changes probably cause disportionately more work and disruption than almost any other item in a Project Manager's busy schedule and must be handled in an orderly and efficient manner if we are to avoid the "firefighting" scenarios seen all too often on projects today. Aegis's expertise in controlling and evaluating changes can relieve a busy Project Manager from the heavy administrative loads resulting from the evaluation, review, discussion and tracking process involved with changes. From our experience, we can advise on which change orders require "fast track" approval in order to avoid schedule delays and which changes can be dealt with in due course.

Using systems developed over the years, we ensure that all changes are properly documented, evaluated, reported and incorporated into both cost and schedule reports to provide management with a clear and concise overview of project status at any given time. Most importantly, we address matters as they arise, actively pursuing settlement of open matters so that you can put these behind you, leaving the path to successful project completion free of obstacles. Having access to an "early warning" and trending system allows management to make strategic decisions based on accurate and up-to-date information.

Communications

Communication is defined as the act of imparting information. Good communication means making sure that the information you “impart” is understood by the recipient. Equally, when you receive information it is important that you understood what is being asked or stated so that you can take appropriate actions. Communication is a two-way street.

During the project execution, many types of communications are used, including:

• Telephone calls
• Verbal instructions
• E-mails
• Meetings
• Site Diaries
• Facsimiles
• Letters
• Site Instructions
• Technical Queries
• Sub-Contractor evaluation Reports

Aegis regards the whole question of communication as a matter of simple physics. Aegis' post-contract management systems support you in ensuring that all communications are logged, tracked and followed-up, and that important decisions and agreements are recorded and confirmed in writing. This helps to avoid mis-communications and misunderstandings and will provide a well-prepared and maintained contemporaneous record of events that can help to avoid claims.

Interim & Final Accounts

One of the important characteristics of the successful engineering, procurement and construction organisation is its ability to move quickly where opportunities need to be captured or disasters avoided. Essential to this opportunistic strategy is a clear financial picture of the state of the Project. The Interim Valuation, giving an up-to-date picture of the value of Contracts and Purchase Orders is part of this picture. Aegis prepares Interim Valuations based on progress or milestones achieved. The interim valuations can also include a valuation of all change orders agreed and approved up to the payment certificate date. Interim Valuations can be derived from Bills of Quantity or from Progress Reports, dependent on the type of contract.

Similarly, Final Accounts are prepared to incorporate all progress payments or milestones, change orders, claims, etc as well as to ensure a release of liens and indemnification against any further claims from sub-contractors or other vendors, suppliers, etc. The Final Account is a powerful instrument in a defensive strategy. It forces the matters of completion and final payments. It ensures that issues are dealt with at a time most advantageous you rather than waiting for a Contractor or Supplier to submit its final bill as and when it suits him.

Cost Control

Project related Cost Control should not be confused with or try to duplicate, head office accounting and bookkeeping. Effective Cost Control is directed far more at the question "What is the maximum value to which I am exposed?" Aegis focuses on the importance of project specific cost controls that allow the development of an accurate budget and facilitate the comparison of the budget to the actual costs and possible exposures as the project progresses. We believe that complacency is one of the greatest threats to successful Project Management and we aim to ensure that this does not occur on your Project. Experience shows that the costs of establishing proper controls are far outweighed by the potential benefits to recover lost revenue.

From initial "range" estimates at tender stage through commodity take-offs to detailed estimates of purchasing and installation costs, Aegis can assist in preparing the estimates and transforming these into a detailed cost breakdown structure. Using proprietary computer software systems, we monitor and compare actual costs expended on the project to the budget estimate and indicate the variances. By identifying and coding the costs associated with changes, we produce reports and documents that can be used to support additional costs for owner requested changes. In addition, the advantage of knowing where the actual costs stand strengthens your position and can allow you to become a more profitable business.

A business invests in the talents and competencies of those personnel involved in its "core business". At Aegis, cost engineering is a core competence and our personnel have years of experience in preparing, monitoring and comparing cost data. Using computer analysis models to compare previous projects' data, much can be done to improve future profitability. The ability to analyse data from several projects is an important function that will allow you to identify and correct potential problem areas before they become major losses.

Comparison and analysis of budgeted cost versus actual cost indicates to management where improvements can be made to reduce potential losses, to improve cash flows and to improve future bidding methods.

There are very few successful companies in today's global economy that do not have to grow or change in order to maintain and strengthen their market position. There is an ever-increasing tendency to achieve this growth and change through acquisition. One of the greatest challenges to the acquisition process is the fact that the acquirer and the acquired do not really know enough about each other’s business despite the determination to make the acquisition. We call this information asymmetry and it is one of the reasons acquisitions fail.

The alternative to the costly process of an acquisition is the strategic partnership. In the world of Design and Build Contracts, Engineering Contracts and Fixed Price Contracts the need to build such partnerships is as strong as it is anywhere. Aegis will use its professional skill to help you to identify the type of partner you need and then find the most suitable partner for you. We will also guide you through the process of setting up the agreement structure with your partner and help you manage the partnership.

Separating core and secondary competencies

There is a fundamental question in any partnership about what you want to share from your partner and what you are willing to share, from your own competencies, with your partner. There will certainly be parts of your company that you wish to retain and protect from the partnership. There may even be a question of inventions or copyright. Other areas may be too weak or unbalanced in order to grow your company and it is for support in these areas that you will be looking to your Partner. In exchange, there may be strong, redundant competencies or resources in your company that you can share with your partner. It is in this area of competence exchange that Alliances are founded. Aegis is skilled in profiling your company to determine how the sharing of Competencies and resources is best structured to support a Strategic Partnership.

Identifying skills

Contracting and Procurement require a certain skill set to be present in an organisation. If these are not present this may in itself be a reason for seeking a partnership. However, if the decision is made to cultivate the skill set internally, Aegis can advise how this can be done and what resources need to be acquired in order to support a partnership.

We have to be honest; trying to build strategic partnerships is very much the fashionable thing to do. It is not always the wisest solution to a company’s problems. Particularly in the construction industry, where time is a driving factor and delivery dates firmly fixed, a partnership can sometimes take too long to build and create value. Aegis believes its Clients are best served by plain good sense and we will advise you if the partnership is not a good idea and help you to look for other solutions.Aegis will work with you throughout the whole partnership process and will advise you on the best framework for an agreement with your partner. It is this commitment to the total partnership process that enables Aegis to build lasting relationships.

Building your relationship framework

As an experienced Contracting consultant we know how best a partnership agreement can be set up and we can compile the necessary documents. It takes time and involves a framework of several documents but Aegis will deliver an agreement framework that protects the business aspects of the partnership while creating enough room for the partnership to grow and flourish.

It would be unique if a partnership were to start operations and hit its target within the required time without some kind of intervention. Over time there may be variations in the market situation and intervention may be necessary just to take account of these. It is knowing when and where to intervene that is important and this is accomplished by setting up operating guardrails through measurement, reporting and evaluation. Aegis will help you set up these guardrails.

Managing your relationship

As an independent consultant, Aegis is in an excellent position to measure the performance of the partnership and we will agree with you the frequency of the measurement and format of reporting.

As we said earlier, Aegis has a commitment to the total partnership process and we can continue to work with you to determine corrective actions needed to keep a partnership on course.